A North East firm has put growth plans on hold because of the drop in oil prices.
Washington-based Oil Consultants – which places workers in oil and offshore locations around the world – is shedding a small number of administrative staff it had taken on to accelerate growth plans.
The firm has put its growth plans in abeyance after many of the oil industry firms it deals with announced huge losses because of the plunging price of oil around the world.
Oil Consultants’ actions follows job losses at a number of offshore industry firms in the North East, while manufacturers’ organisation EEF has noted that the sharp fall in oil price has had an impact on a number of its members in the region. Oil Consultants chief executive Helen Smith said: “We are specialist providers of consultants into the oil industry and everyone is probably aware that there has been a significant drop in oil price that has affected some of our clients hugely.
“We had been staffing up for significant investment in growth, which is something we have been enjoying in the business for a number of years, but it’s clear that now is not the right time to invest in the market as it stands.”
Oil Consultants, which has offices in Australia, America and Dubai as well as its base in Washington, currently employs around 70 people. Job losses will be in the single figures, Ms Smith said.
The loss of staff follows larger job losses at a number of oil companies in the region, including Archer, Deep Ocean and Flexlife.
The pressure on the offshore sector has also shown up in a regional survey being published today by EEF and global law firm DLA Piper.
The survey shows that the region’s manufacturers have put in a good performance in the first quarter of the year with a net 11% reporting increased output, 11% saying the same of investment and 21% reporting a boost to employment.
But the oil price crash has impacted on firms in the North East, with 5% of local manufacturers reporting a drop in orders, highlighting the more challenging domestic demand environment faced by those with a high exposure to delayed or cancelled investments in the North Sea.
Liz Mayes, North East region director at EEF, says: “Any concerns that manufacturing activity might wobble at the start of 2015 have been quashed.
“These findings show that output, investment and recruitment plans all headed in the right direction, which is a good indication of the confidence companies feel.
“However, it’s clearly not plain sailing for all, and the drop in the oil price has fed through to weaker demand in the oil and gas supply chain, which is significant in the North East.
“This had an impact on orders in the last quarter, but looks to be easing back for the quarter ahead.
“While confidence levels overall are holding firm, policies to sustain positive investment plans, encourage exporters and improve access to skills remain the order of the day.”